Businessweek Archives

The (Cyber) Road To Southeast Asia (Int'l Edition)

May 28, 1995

International -- Intl' Business: SINGAPORE

THE (CYBER) ROAD TO SOUTHEAST ASIA (int'l edition)

Singapore, known for its curbs on information, is at the center of a battle for the most formidable purveyor of information yet--the Internet. Up for grabs is the first foreign license to provide online services--with Microsoft, IBM, and Apple Computer slugging it out for the deal. They view Singapore as a testing ground for telecommunications services for the region. "Singapore will be a springboard for us," says Mark Yong, IBM Singapore general manager.

That's what the Singapore government has in mind. It boasts a First-World infrastructure that has attracted hefty investments from high-tech giants in everything from state-of-the-art manufacturing to research and development centers. By opening online services to foreign contenders, Singapore is signaling its determination to be the communications pacesetter for the rest of Asia.

LOCAL PARTNER. But for a country that dubs itself a leader in information technology, Singapore's online services are sorely inadequate. SingNet, the only commercial service, has been racked by too few phone lines and poor customer support. The other service, TechNet, is mostly used by researchers. Both provide little more than access to the Internet to their 44,000 accounts. That opens the way for a third provider that can offer lower rates, better service, and original content. The government invited formal bidding on May 17.

Microsoft Corp. is regarded as the favorite. Regulators require that the third provider have an established joint venture with a local partner--and Microsoft is expected to form one with the government within the next few weeks. The venture would couple Microsoft's technology with Singapore's databases, creating education, entertainment, online banking, travel services, and chat sessions, all with a local flavor. "We want to stress Asian content," says Darren Lockie, marketing manager at Microsoft's Singapore office.

IBM and Apple are still in the race against Microsoft. IBM already provides services in three Asian countries. In mid-May, it announced an online service in Hong Kong and a joint venture in Indonesia. But Singapore's aggressive high-tech plans and its world-class telecom infrastructure make it an ideal lab for developing content for larger Asian markets, says IBM's Yong.

Apple has similar ambitions. Having launched its eWorld service in the U.S., Europe, and Australia, the company is entering the Asian market.

It recently set up a group in Hong Kong to oversee its regional sales and says it is working to sign up Asian publishers. It, too, is talking with Singapore authorities about providing online services.

The big American names have overshadowed some homegrown contenders interested in getting into the business. They include Singapore Technologies, Singapore Network Services, telecom-equipment maker WyWy Group, and newspaper publisher Singapore Press Holdings.

STRICT LAWS. The Singapore government is the driving force behind the island's leap into cyberspace. It has laid fiber-optic wiring to an estimated 75% of the country's buildings, with the remainder expected to be wired by 1997. The government wants to beef up services, including putting its institutions and businesses on the Net. Already online are the national library, the Education Ministry, and even the state-run matchmaking agency.

Whichever company wins the contract will have to contend with Singapore's strict rules. The government has extended its tough antipornography and libel laws to cyberspace, with offenders subject to jail and fines. Online providers are expected to abide by government guidelines, which require TechNet and SingNet authorities to keep out offending information. In order to counter "misinformation" about the country, the government has members of the ruling party's youth wing police the Net by monitoring chat sessions and offering the state's viewpoint in discussions.

Potential vendors have to be attentive to those concerns. "We have to work within the guidelines of the government here," says Rob Sebastian, a technical marketing specialist at IBM Singapore. American companies are betting that the state's tight regulatory policies won't cause them too many problems. Besides, the winner gets a solid spot in a key Asian market.

GETTING WIRED IN SINGAPORE

MICROSOFT Expected to form joint venture with Singapore government to offer banking, travel, entertainment, and other services

IBM Has started online service in Indonesia that it wants to expand to Singapore

APPLE COMPUTER Has entered negotiations with Singapore officials to offer its eWorld service